Dunleavy reveals Alaska state budget proposal

Alaska’s schools, universities, health care programs and ferry system all would see huge spending cuts under a new budget proposed Wednesday morning by Republican Gov. Michael Dunleavy.

The spending plan would overhaul major government functions and eliminate specific programs and services. Dunleavy said the cuts are needed to balance the state budget while paying out larger Alaska Permanent Fund dividend checks under a historical legal formula.

“I’m going to be bold here for a moment. I think everyone in this room knows we have to get our fiscal house in order. And I think everyone in this room and in this state realizes that there’s going to be sacrifices across the board, that this has gone on too long, and that it’s got to stop,” he said.

The proposals were released Wednesday morning, and state lawmakers and budget experts were still piecing through them by midday.

One of the big takeaways is a 23-percent cut to Alaska’s per-student schools spending, a reduction of $279.4 million.

The proposal would cut state unrestricted general fund spending on its university system nearly in half — from $348.7 million to $193.1 million.

Dunleavy also wants major reductions in spending on Medicaid, the state-federal health care program for low-income Alaskans. And he’s proposing big cuts to state ferries and the potential to privatize parts of it.

One way Dunleavy would raise more money for the state? Take it from municipalities. He’s proposing to eliminate the ability of municipalities to levy property taxes on oil and gas infrastructure; that tax revenue would flow to the state instead.

Dunleavy’s budget proposal is only the first in a long legislative process — the plan now goes before the House and Senate, which have the power to add money back.

This story has been updated.

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